Exhibit 10.5

                          CERRO GORDO LETTER AGREEMENT

This letter agreement dated as of the 1st day of September, 1996 is made between
Earth Sciences, Inc. ("ESI"), a Colorado corporation and Martin Trost Associates
("MTA") a Colorado  joint venture  consisting of Mine  Development & Engineering
Corp. ("MDEC"), a California corporation and MTAARI, Inc. ("MTAARI"), a Colorado
corporation.  The  principals of MDEC and MTAARI are Bill Martin and Paul Trost,
respectively.

                                    RECITALS
MTA has leased certain  patented and  unpatented  mining claims near Cerro Gordo
peak in Inyo county,  California from Ms. Jody Stewart and the Montgomery  Moyer
Trust (the "Mining  Claims"),  under lease  agreements dated August 29, 1995 and
April 1, 1996,  respectively (the "Leases").  MTA has provided true and complete
copies of the Leases to ESI.

ESI and MTA desire, initially through an additional joint venture formed by them
(the "JV"),  to further  explore,  develop and place into  production the Mining
Claims.  ESI will  generally  arrange  for funds for  continuance  of the Lease,
preservation of the Mining Claims and other JV activities.  ESI's obligation for
expenditures  may earn ESI a working  interest in the Lease,  as outlined below.
MTA will  contribute  the Lease to the JV and, as approved by the JV,  agrees to
act as the operator for JV activities.  Both ESI and MTA will look solely to the
profits from future  production from the Mining Claims or proceeds from the sale
of JV assets to recover their respective investments in the JV. Both ESI and MTA
will only charge the JV on a cost basis for  activities  performed  on behalf of
the JV

                                    AGREEMENT
1.  DUTIES AND OBLIGATIONS OF THE PARTIES
ESI,  at its sole cost and  expense,  will  arrange  for up to $4.2  million  to
explore the Mining Claims and place the 'H' area into  profitable  production to
earn an 80%  working  interest in the Mining  Claims and  Leases.  Preproduction
exploration  has been  estimated by MTA at $650,000.  MTA will provide access to
all of the technical data it has in its possession  and/or  available to it, and
will provide assistance in JV activities as directed by the JV.

2.  FUNDING
Based on budgets  and  schedules  approved by the JV, ESI will fund the costs of
all JV  activities  up to the  agreed  amount  of $4.2  million  or until the JV
achieves cash flow, whichever occurs first.  Nevertheless,  ESI may, in its sole
discretion after a 30 day written notice to MTA, cease funding the activities of
the JV without  any future  obligation  except  for its  portion of the  working
interest  in the Leases and Mining  Claims it may have earned as a result of its
expenditures.  In accounting for the expenditures of ESI,  reasonable  salaries,
wages,  overhead and out-of-  pocket costs on a no profit basis of ESI personnel
engaged in JV activities shall be included.  The value of MTA's  contribution to
the JV as of the date of this  Agreement  is agreed to by the  parties  to equal
$92,000.

3.  ADDITIONAL FUNDING REQUIREMENTS
In the event that the funding  obligation of ESI is insufficient to achieve cash
flow  from  production,  the JV will  first  seek  third  party  debt or  equity
financing.  Failing such third party financing, ESI and MTA shall contribute the
funds required by the JV in proportion to their  respective  working interest at
the beginning of the calendar quarter in which funds are required.  In the event
that a party is either  unable or unwilling to  contribute  their  proportionate
share, the other party may make such contribution  diluting the working interest
of the non-contributing  party in proportion to the new expenditure required and
the total project expenditures.

4.  PURCHASE OF THE ROYALTY
At least one of the Leases  provides  the option to  purchase a royalty  granted
therein.  If,  outside the JV, either party were to exercise any such option the
other party shall have the right for a 2 year period to pay the purchasing party
their proportionate  amount of the purchase price plus interest at prime plus 2%
so that the royalty becomes owned by the JV.

5.  TIME SCHEDULE
Time is of the  essence  and both ESI and MTA  agree  to  carryout  all of their
respective duties and obligations under this Agreement in a timely fashion.  The
management  committee of the JV will establish a tentative  schedule of foreseen
near term activities as soon as practical.


                                       


<PAGE>

6.  FORMATION OF THE JV
ESI and MTA  agree to form a JV to  manage  and  control  the  joint  activities
intended under this Agreement. The JV shall not carry on its activities in a way
that it could be construed to be a  partnership  for U.S. tax purposes  and, ESI
and MTA agree to take all  reasonable  step to avoid such  classification.  With
regard to the recognition of tax attributes, any assets acquired by the JV shall
be jointly owned in proportion to the working interest of the parties at the end
of the calendar year in question.

7.  JV MANAGEMENT COMMITTEE
All the affairs of the JV shall be directed by a management committee (the "MC")
consisting  of 3 members  from ESI and 2 members  from MTA.  Decisions of the MC
will be on a  consensus  basis.  If a consensus  cannot be reached,  the MC will
proceed as provided below in the mediation section below.

8.  MTA AS OPERATOR
MTA will  serve as the  operator  for the JV.  The  continuation  of MTA in that
capacity  shall be subject to the  review  and  approval  of the MC from time to
time.  In such  capacity,  MTA has advised  that it will  charge  overhead on JV
expenditures which it manages as follows: 5% on 3rd party contractors, 7 1/2% on
purchases of materials and  supplies,  and 10% on other  expenditures.  MTA will
rent  equipment  it owns to the JV at blue book  rates less 10%.  Such  overhead
charges are to  represent an  estimation  of actual cost and are not intended to
include any significant  element of profit or loss.  Such overhead  charges will
compensate  MTA  for  the  cost  of  incidental   management  salaries,   office
facilities,  telephone,  and  other  items  commonly  included  in  general  and
administrative  expenses. As operator,  MTA will submit budgets and schedules to
the MC which shall  include their  overhead  charges for approval of the MC. MTA
and ESI management  personnel shall be reimbursed by the JV for their direct and
indirect costs without any additions.

9.  DISTRIBUTION OF PROFITS AND PROCEEDS
The   distribution   of  net  profits  and  any  net  proceeds   shall  be  made
proportionately to ESI and MTA until they have recovered their investment plus a
factor  for the cost of money  equal to the prime  interest  rate plus 2% if the
funds have been borrowed or the interest  income lost if funds come from amounts
on hand.  Thereafter,  ESI and MTA shall  share in the  distribution  of any net
profits and/or net proceeds on an 80/20 basis

10.  EARN-IN
As a  result  of its  expenditures  under  this  Agreement,  ESI  shall  earn an
undivided  interest  in the  Leases,  any  equipment  owned by the JV and Mining
Claims pursuant to the following schedule:

         Expenditure Level                                    Interest Earned
         -----------------                                    ---------------
         $  0         -  $  149,999                                 0%
         $  150,000   -  $  499,999                                10%
         $  500,000   -  $  999,999                                25%
         $1,000,000   - $1,999,999                               37.5%
         $2,000,000   - $4,199,999                                 50%
         $4,200,000                                                80%

MTA agrees to evidences such earned interest by a recordable assignment to ESI.

11.  MEDIATION
In the event the MC cannot  reach  consensus  on any issue it shall  become  the
subject  of  mediation  under  the  following  guidelines:  (1) ESI and MTA will
jointly select an unrelated third party familiar with the mining  industry,  (2)
with the aid of the third party ESI and MTA will reach a consensus  on a further
course of action.

12.  RIGHT TO ENCUMBER LEASES
ESI is granted  the right to encumber  the  Leases,  subject to the terms of the
underlying Leases, solely for the arrangement of financing its obligation for JV
activities.  ESI is responsible for repaying any such financing out of its share
of the JV cash flow.

                                       2

<PAGE>


13.  AREA OF INFLUENCE
The parties  agree to an area of  influence  of 5 miles from the location of the
Mining Claims in which all property or data already  acquired or acquired in the
future by either party will  immediately be disclosed to and become the property
of the JV. The  restriction  imposed by this  section  shall apply for two years
after the termination of the JV.

14.  TERMINATION
Either  party may  terminate  the JV at any time by  providing  30 days  written
notice to the JV, by paying for all JV  commitments  that were incurred prior to
the date of termination, and by assigning all of its right title and interest to
the Leases and Mining Claims to the other party.  In any event,  ESI and MTA can
mutually  agree  to  terminate  the JV at any  time.  In no case  will an act of
termination  relieve a party from liability for acts of the JV during the period
of that party's involvement.

15.  AGREEMENT TO FURTHER DEFINE UNDERSTANDINGS OF ESI AND MTA
The  parties  agree  that at a  mutually  agreeable  future  date that they will
negotiate  in good  faith to  further  define  and  formalize  the  relationship
outlined herein.

                                   SIGNATURES
In witness of the mutual  covenants and agreements made herein,  ESI, and MTA by
its principals, set their hands and seals as of the day first written above.

Earth Sciences, Inc.                       Martin Trost Associates


/s/ Mark H. McKinnies                     /s/ Bill Martin
-----------------------------------       -------------------------------------
by Mark H. McKinnies, its President       by Bill Martin




                                          /s/ Paul Trost
                                          -------------------------------------
                                          by Paul Trost


                                       3